In the beginning, there was calm. The industry brushed off the sequins and snowflakes of another year's renewal and found itself on unsurprising turf. As was the case a year ago, The Sims controlled the PC charts--well, behind Call of Duty in the number one slot, that is. The Sims publisher Electronic Arts, in fact, held on to seven of the top 10 best-selling game slots for the year's first week (The Sims taking up five spots, with Madden 2004 and SimCity 4 rounding out EA's showing). Console sales leaders Need for Speed, True Crime, Dragon Ball Z: Budokai 2, and Madden 2004 (all for the PS2) also raised no eyebrows.

I wouldn't go there, if I were you.

The first signs of excitement came with news that a URL that slipped into the game environment of Tom Clancy's Rainbow Six 3 handily drove traffic to a porn-laden Web site, thanks to an entrepreneurial player who noticed that the URL wasn't spoken for. Yes, little Billy, special operatives do score more often with the ladies.

Other signs of life? A short-lived listing for Grand Theft Auto IV: Sin City on Amazon's UK Web site whetted appetites for the next iteration in the series, a tantalizing glimpse of Infinium Lab's Phantom console at CES (well, it looked good, anyway), and the beginning of the end for Acclaim--the Burnout license slipping from its hands, landing with franchise-hungry Electronic Arts.

Hey, lookie here. Someone else who tried to get a comment from Sony...

Other losses? Well, there were plenty. Atari closed down its Legend Entertainment studio (developer of Unreal II), Ubisoft killed the online component of Uru: Ages Beyond Myst, Microsoft quietly buried Mythica, and Sony killed any thoughts of the PSP coming stateside anytime during the current year.

Not sure who the winner or loser was here, but it made good copy when top designer and Naughty Dog cofounder Jason Rubin skewered Sony in a finger-wagging indictment that caught DICE attendees unprepared.

Eventually, the first quarter of 2004 ended with a whimper. Arbiter of game and hardware sales NPD Funworld checked in with news that hardware sales for the quarter were off 25 percent compared to the year before. The market was saturated with current-generation consoles according to its analysts--gamers were hearing about the new systems and were saving their pennies even then.

The next quarter would dawn with a little more spice. Thoughts of future electronic delights were on gamers' minds. And they would not be disappointed.

January Ed Fries exits Microsoft The gaming giant tenders his resignation after 18 years of producing, deal making, and championing the Microsoft Games Studio. Warner Bros. gives games another shot The title-rich movie studio swaps a licensing agenda for an in-house production model, and hires Monolith cofounder Jason Hall. Marvel forms video game group Marvel Enterprises appoints a manager of game development to oversee the production of licensed games. New titles revealed. Nintendo to make dual-screen portable Code-named the "Nintendo DS," the Japanese giant's new game deck will be formally unveiled at E3. Rumor of the Month Rumors about bootleg Half-Life-2 copies being on sale in the Ukraine and Belarus had been bouncing around for over a month. When photos of something being sold as a "playable game" surfaced, we took a closer look.

February Acclaim reports significant losses Despite cost-cutting and a smarter release calendar, the once-mighty publisher loses $31 million over nine months. Infinium Labs ready to haul HardOCP into court The Phantom maker charges the Web site with dealing in misinformation and defamation, while HardOCP stands by its story. Confirmed: No PSP until 2005 Sony quietly delays its portable, and confirms the "adjusted launch" to GameSpot. Origin obit confirmed On a tear to consolidate its studio operations, EA says it will close down Ultima Online developer Origin Systems. Rumor of the Month Too-good-to-be-true rumors of a Tecmo-authorized life-size body pillow featuring Dead or Alive Ultimate's Kasumi in a bikini sounded too absurd to be true. At 5 feet 3 inches in length, and with the image of Kasumi "in one of the more revealing swimsuits this side of Rio," this one panned out as true.

March Prime-time TV losing out to PS2 SCEA announces that many PS2 gamers prefer playing online games to watching TV during traditional prime-time viewing hours. Jason Rubin to exit Naughty Dog The outspoken Jak and Daxter cocreator is taking his manifesto to heart and striking out on his own. Electronic Arts to offer The Godfather The publisher confirms an adaptation of the classic Francis Ford Coppola film, and it will likely be M-rated. Microsoft "resting" XSN Sports this season Microsoft confirms that a number of its XSN Sports franchises will be out of commission this year, returning much improved in 2005. Rumor of the Month When a finance-focused Web site started talking up the fact that "Microsoft chief [Bill Gates] badly needs more video games" to compete with the PlayStation 2--and was eyeing Midway Games as his target--Rumor Control went into overdrive.

Next: Year in Review 2004 Q2 >>